‘Kiwi’ dropped from three-week high

Pound Sterling

Yesterday Sterling was able to gain on its US competitor following the Monetary Policy Committee’s decision to hold rates at their previous level and leave fiscal policy unaltered. However, after the European Central Bank also left policy unchanged and gave no indication of altering the situation in the near future the Pound declined against the Euro. Today movement in the British currency could be triggered by this morning’s UK industrial production and manufacturing production figures but the most likely cause of volatility will come this afternoon, in the form of the NIESR GDP estimate.

The Pound is presently trading against the Euro in the region of 1.2182 and is trading against the US Dollar in the region of 1.6149

US Dollar

An improved outlook for the Eurozone led to risk taking in the marketplace yesterday, causing the safe-haven ‘Greenback’ to fall against several of its higher-yielding peers. The most volatile pieces of US data scheduled for release today are the nation’s trade balance figures for November and monthly budget statement for December.

The US Dollar is presently trading against the Pound in the region of 0.6193 and is trading against the Euro in the region of 0.7545

Euro

After the ECB’s rates decision and accompanying statement the outlook for the Eurozone significantly improved and risk appetite grew. EU officials asserted that the region’s economy would begin to show positive progress in the months ahead, which led to the Euro posting significant gains against several of its most traded peers – most notably the US Dollar and Japanese Yen. A lack of economic news for the Eurozone means that fluctuations in the common currency will be limited but could follow data releases for the UK and US.

The Euro is presently trading against the Pound in the region of 0.8211 and is trading against the US Dollar in the region of 1.3258

Australian Dollar

Data revealing that Chinese inflation quickened by more-than-forecast offset separate figures which showed an unexpected increase in the nation’s consumer price index and caused the currency of Australia, one of China’s main trading partners, to pare recent gains. The ‘Aussie’ dropped from close to a four-month high against the US Dollar, shedding 0.1 per cent, and recorded declines against several other main counterparts. The South Pacific currency did gain on the Japanese Yen however, climbing 0.2 per cent. Investors will now be looking ahead to next week’s key economic data releases for Australia, including consumer confidence statistics and unemployment rate/employment change figures.

The Australian Dollar is presently trading against the Pound in the region of 0.6543, is trading against the Euro in the region of 0.7968 and is trading against the US Dollar in the region of 1.0568

New Zealand Dollar

After Asian stocks retreated following their recent advance the New Zealand Dollar also fell back. The ‘Kiwi’ shed 0.4 per cent against its US counterpart, dropping from its previous three-week high, but remained relatively unchanged against other safe-haven asset the Japanese Yen. A lack of home-grown news will temper ‘Kiwi’ movement in the hours ahead but next week will see the release of several significant economic indicators for New Zealand, including Monday’s card spending figures.

The New Zealand Dollar is presently trading against the Pound in the region of 0.5208, is trading against the Euro in the region of 0.6434 and is trading against the US Dollar in the region of 0.8414

Canadian Dollar

During trade yesterday the Canadian Dollar was able to benefit from China’s better-than-expected export data and the ECB’s rates decision, climbing to 1.0140 US Dollars from 1.0125 US Dollars. Today’s Canadian international merchandise trade figures are unlikely to cause ‘Loonie’ fluctuations but developments in the US could cause movement before the close of trade.

The Canadian Dollar is presently trading against the Pound in the region of 0.6299, is trading against the Euro in the region of 0.7669 and is trading against the US Dollar in the region of 1.0171

 

Richard Martin
This post was written by
After working in business development for a major UK currency brokers for several years, Richard left Britain to help set up the company’s Australian office and now lives and works in Queensland; making the most of his new Down-Under lifestyle.